Chemplast Sanmar · Material risks, their source context, and severity in the latest available quarter.
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Risk intelligence
Chinese carbide PVC continues to flood Indian markets at low prices, keeping spreads at breakeven levels. Regulatory support (ADD, QCO) has not materialized, and the 7.5% duty reduction further pressures margins.
The Middle East war has caused acute shortage of naphtha and ethylene, spiking VCM prices and disrupting feedstock supply. While the team secured short-term supply, long-term feedstock security remains a concern.
The company is building significant R32 capacity (14 KT) without confirmed government quota allocation under the Kigali Amendment. Quota clarity is expected only by 2027, posing a risk if allocations are lower than expected.
Management indicated that a few more onerous contracts will hit production in May-June 2026, potentially leading to negative contributions in the near term despite the ₹150 crore provision reversal.
